UK Government pledges to set zero tariff regime on some imports in no-deal Brexit

UK – The UK government has
pledged to set the majority of import tariffs to zero while maintaining tariffs
for the most sensitive industries within the food, beverage and agricultural
space.

If
the case that UK leaves the European Union with no deal, the government has said
it will cut tariffs on a range of imports from outside the EU and introduce
measures to avoid a hard border in Northern Ireland.

The
announcement by the government comes after lawmakers in the House of Commons voted
against Prime Minister Theresa May’s Brexit deal.

This
is despite the earlier reports by the government that it had secured “legally
binding” changes to its withdrawal agreement with the European Union.

May
had indicated that the changes were designed to avoid a hard border in Ireland,
something she thought could help push for the backing needed on the Withdrawal
Agreement which sets out an orderly exit from the EU.

The food
industry to be among the hardest hit

If
a no-deal Brexit scenario occurs, experts say the food industry would be among
the hardest hit.

Leaders
across the industries have been lobbying for clarity on Brexit, amid serious
concern over a multitude of issues that would come with a “catastrophic” no-deal.

Food
and Drink Federation Chief Executive, Ian Wright claimed that the new changes
by the government, including the temporary zero tariff regime was confusing and
complex.

The
new rules include some zero tariffs, some new tariffs and some quotas, in that
while some foodstuffs qualify for partial protection, others may not qualify to
any protection.

“New
tariffs will apply to some foods that are currently imported tariff-free, yet
no tariffs will be applied to goods that cross the border between Ireland and
Northern Ireland.

This
is likely to result in massive trade distortions,” said Ian Wright to FoodIngredientsFirst.

“In
a world where it is costly and complex to export finished goods to the EU, and
costly and complex to import key ingredients, many food and drink manufacturers
who trade with the EU will surely question whether the UK is the right place
for them to be.

“This
is yet another reason why Parliament must, this evening, act decisively to
remove the threat of exiting the EU without a deal on 29 March.”

He
says that the second defeat by Theresa May was “another body blow” for the
country and the UK’s largest manufacturing sector.

What the
temporary tariff regime is all about

According
to the government, the temporary tariff regime for a no-deal scenario is
designed to minimize costs to business and consumers while protecting vulnerable
industries.

Under
the agreement, imports into the UK would not attract a tariff in the event of a
no-deal Brexit.

The
government will also take a temporary approach to avoid new checks and controls
on goods at the Northern Ireland in the case of no-deal Brexit.

Based
on the arrangement, tariffs would still apply to 13% of goods imported into the
UK through a mixture of tariffs and quotas on beef, lamb, pork, poultry and
some dairy to support farmers and producers who have historically been
protected through high EU tariffs.

Speaking
on the development, Trade Policy Minister George Hollingbery said: “Our
priority is securing a deal with the EU as this will avoid disruption to our
global trading relationships. However, we must prepare for all eventualities.

“This
balanced approach will help to support British jobs and avoid potential price
spikes that would hit the poorest households the hardest.

It
represents a modest liberalization of tariffs and we will be monitoring the
economy closely, as well as consulting with businesses, to decide what our
tariffs should be after this transitional period.”